Skip to content

Commit

Permalink
fix(docs): clarify collateral reservation fee details in minting proc…
Browse files Browse the repository at this point in the history
…ess (#443)
  • Loading branch information
fassko authored Dec 20, 2024
1 parent 987d54f commit adc807d
Showing 1 changed file with 7 additions and 4 deletions.
11 changes: 7 additions & 4 deletions docs/fassets/3-minting.mdx
Original file line number Diff line number Diff line change
Expand Up @@ -51,13 +51,16 @@ The following fees are paid to mint FAssets:

### Collateral Reservation Fee

The **collateral reservation fee (CRF)** is paid in native tokens by the minter at the same time the [CRT](#minting-process) is made.
The **collateral reservation fee (CRF)** is paid in native tokens by the minter at the same time the [collateral reservation](#minting-process) is made.
The CRF is defined by governance as a percentage of the minted value, and the same fee applies to all agents.

When the minter does not pay on the underlying chain, this fee compensates the agent and the CPT holders for the time their collateral was locked while the mint processed.
If the minter pays on the underlying chain, the CRF is burned.
The purpose of the CRF is to compensate the agent and collateral pool token (CPT) holders for the time their collateral is locked during the minting process.

For underlying chains on which proving payments takes a long time, the fee might be higher than the fee on chains that quickly prove payments.
- If the minter does not pay on the underlying chain, the CRF is distributed to the agent and the pool in the same share as the minting fee.
- If the minter successfully pays on the underlying chain, the CRF is also distributed to the agent and the pool in the same manner.

For underlying chains where proving payments takes longer, the CRF might be set higher to account for the extended lock-up time.
The CRF percentage is defined by governance and may vary based on the performance of the underlying chain.

### Minting Fee

Expand Down

0 comments on commit adc807d

Please sign in to comment.